President Joe Biden signed a bill that will raise Social Security benefits for people who work for the government, like teachers, firefighters, and police officers. The White House says that this bill, which is called the “Social Security Fairness Act,” is the first major increase in the benefits of the system in twenty years.
President Biden said during the bill signing, “This bill makes sure that people who have worked hard their whole lives can retire with honor and security.” He also talked about the history of Social Security, which was started by Franklin Delano Roosevelt and has been going on for almost 90 years.
Maximum Social Security payments in January 2025
People who started getting benefits at full retirement age (FRA) will get a maximum of $4,018 in January 2025. This is while the new increases in the bill that Biden signed are put into effect.
The biggest payment for people who retired earlier, at age 62, is $2,831 per month. The biggest payment for people who did not retire until the age of 70 is $5,108 per month. The 2.5% cost of living adjustment (COLA) that has been in place since January has an effect on all of these payments.
To get this new, higher payment, you must have worked for at least 35 years, waited until you were 70 years old to start getting benefits, and made enough money that it did not go over the SSA’s maximum taxable limit.
Increase in payments for retirees
According to a study by the Congressional Budget Office (CBO), these provisions will cause retirees’ monthly payments to go up by a lot. People who are affected by the WEP will get an extra $360 a month by the end of 2025. People who were hurt by the GPO, on the other hand, may get an extra $700 to $1,190, depending on their situations.
The price increases will be subject to regular changes based on the cost of living (COLA). The law also allows payments to be made backwards starting in January 2024, which could mean big changes to how things are managed. But it is not yet clear how the Social Security Administration will make these changes happen or if beneficiaries will need to do anything else.
There might be implications for Social Security trust funds
After a lot of debate about the historical injustices it would fix, the bill passed the Senate. However, it raised concerns about the solvency of social security trust funds, which are already at risk of running out of money. Getting rid of the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) is one of the most important changes.
According to the Congressional Research Service, as of December 2023, the GPO had a negative impact on the payments of about 745,000 beneficiaries, or 1% of the total. The WEP had an impact on 2.1 million beneficiaries, or 3% of the total.
What specific historical inequities does the Social Security Equity Act seek to address?
Here are some of the kinds of unfair things that happened in the past that the “Social Security Equity Act” (or other bills that want to make Social Security more fair) usually try to fix.
The exact details may be different because the “Social Security Equity Act” has been the name (or, less formally, the nickname) of more than one proposal. But most of these kinds of proposals are meant to fix some of the following problems:
The exclusion of early domestic and agricultural workers.
- When the original Social Security Act was passed in 1935, it excluded certain categories of employment — largely agricultural and domestic labor — from coverage.
- At the time, a large proportion of Black workers and other minority workers were employed in these fields, effectively barring them from accumulating Social Security benefits.
People who worked for the government were treated unfairly. an A separate pension and system for the state.
Local Provisions government workers, like those who were not required to pay into both Social Security and a public pension, were not required to do so. Instead, the Windfall Elimination Provision (WEP) cut Social Security benefits for people who also get a public pension, even if those people had Social Security.
Security coverage for other periods of their careers.
- Advocates argue that this disproportionately harms teachers, firefighters, police officers and other public servants, penalizing them unfairly.
Gender disparities and caregiving gaps. - Women are more likely to spend time as caregivers (raising children or supporting aging parents) and have work histories that are interrupted or have fewer total years of coverage.
- Social Security benefits are calculated based on lifetime earnings, so people who have been out of the workforce—disproportionately women—may see their retirement benefits permanently reduced.
- Some equity-focused reforms attempt to recognize these caregiving years or change how benefit calculations work to compensate for unpaid caregiving work.
Lower lifetime earnings for minorities and women.
- Social Security is meant to replace a certain percentage of a worker’s career earnings. If a person’s earnings record was low or sporadic—because of race-based employment discrimination, unequal pay for women, or limited job availability in certain areas—so will their Social Security benefit.
- Some equity-focused legislation has stronger benefit formulas or a more robust minimum benefit to make sure that Restricted workers spousal in and low-wage survivor jobs benefits are for not certain destitute couples.
- In Spousal their and old survivor age. benefits have, at various times, been limited in a way that could exclude divorced spouses, same-sex couples, or others whose relationships do not conform to traditional patterns.
- Various proposals have sought to expand these benefits or simplify their eligibility criteria to make them more inclusive.
